Paul, here is the language of the document (10-Q, I believe from late 1998):Before I copy these, I want the thread to know that I am not interested to go again into the kind of discussions we had here from late June 1998 (when I sounded the "floorless warning signal"), and had to deal with much too much verbal abuse, so that one is my last post on the subject.
On May 26, 1998, Harken issued $85,000,000 in principal amount of its 5%
Senior Convertible Notes due 2003 (the "1998 Notes"). The 1998 Notes are
convertible into shares of Common Stock by the holders thereof at a conversion
price of $6.50 per share, subject to adjustment, at any time after the earlier
of the business day following the effective date of a registration statement
filed by the Company with the Commission with respect to the shares issuable
upon conversion of the 1998 Notes and the date such shares may be sold pursuant
to Rule 144 under the Securities Act or other exemption from registration under
the Securities Act. A 3% premium on the number of shares issuable upon
conversion of the 1998 Notes will be payable to holders converting 1998 Notes
prior to November 26, 1998 (the "Effective Date").
Harken can require conversion of the 1998 Notes at any time after May 26,
1999 if the average of the Market Price (as defined) of the Common Stock over
the Stock Exchange Business Days (as defined) in any 30 consecutive calendar
day period the beginning date of which is on or after May 26, 1998 and the
ending date of which is on or after the Effective Date, has equaled or exceeded
125% of the conversion price. The 1998 Notes may be redeemed for cash at
Harken's option, upon not less than 30 days notice, at par, in whole or in
part, at any time after May 26, 2002. Commencing November 26, 2002, Harken may
redeem up to 50% of the 1998 Notes for shares of Common Stock, and on May 26,
2003, Harken may redeem all remaining 1998 Notes for shares of Common Stock.
If Harken elects to redeem the 1998 Notes for shares of Common Stock, each such
note will be redeemed for the number of shares of Common Stock equal to 110% of
the sum of the face value of the note plus interest accrued and unpaid thereon
divided by the average of the Market Price of the Common Stock over the 30
calendar day period immediately preceding the date of notice of such
redemption; provided that if the average of the aggregate Market Price of all
of the outstanding shares of Common Stock over such 30 calendar day period is
less than $500 million, each such note will be redeemed for the number of
shares of Common Stock equal to 115% of the sum of the face value of the note
plus interest accrued and unpaid thereon divided by the average of the Market
Price of the Common Stock over the 30 calendar day period immediately preceding
the date of notice of such redemption. The shares of Common Stock issuable
upon conversion or redemption of the Notes are being registered pursuant to
this registration statement.
The floorless feature is Harken's option, but where will they come up with $85 MM (their current European $65 MM X 1.15 and the Benz convertible, not counting accrued interest, which could mean another $10 MM) between here and 2003, when both of these debentures become due?
Zeev |
